Internet advertising revenue reaches $17 billion

Spending for Internet advertising reached $17 billion in the first half of the year, up 14% from the same time in 2011, as marketers seem to grow increasingly comfortable with using mobile devices and digital video to communicate brand messages.

Search-related advertising still dominates online spending, accounting for 48% of revenues for the first half of 2012, according to a newly released report from the Interactive Advertising Bureau. However, mobile was the area of fastest growth, with spending nearly doubling year over year, to reach $1.2 billion in the first six months of the year, the report said.

"Bringing the power of the Internet to mobile devices has opened up a world of possibilities to both consumers and marketers," said David Silverman, a partner at PricewaterhouseCoopers, which prepared the report.

Digital video ads -- the Internet equivalent of television commercials -- rose to a little over $1 billion in revenue in the first two quarters of 2012, an 18% gain from a year ago, the report said.

Retailers cut spending for the first half of the year to about $3.4 billion, a 4% decline from a year ago. Despite the decrease, this category of marketers remain the biggest online spenders, accounting for 20% of revenue.

Telecommunications, financial services and automotive businesses also advertise heavily online, with each group spending in excess of $2 billion in the first half of 2012, the report said.